Craig’s Explanation of past Comcast Negotiations

I wrote this email several years ago in the midst of our Comcast negotiations and thought it was worth posting for people to get some background information on the recurring concern that Comcast has a formal monopoly on Cable in Cambridge. It doesn’t, but no one else wants to install Cable here.

Folks: I thought you might be interested in what’s going on with the Cambridge/Comcast franchise renegotiation so I typed up my notes from an 18 June public meeting on the subject. I can’t promise that I caught everything absolutely correctly, and I don’t know any more about this process than what was said in the meeting, so please forgive any mistakes. If you have concerns or questions about the cable franchise renewal process, you may wish to direct them to Nancy Schlacter, on the ‘to’ line of this message, as she’s the City Manager’s contact person for this issue. Feel free to forward this info to anyone else you might thing interested.

Thanks a lot, and have a great summer.

Craig Kelley

Cambridge City Council

The City has hired a consultant to help us through the cable franchise renewal process, which happens once every ten years for each franchise holder (sometimes with a few years’ extension between renegotiations). Right now, Comcast is the only cable franchise holder in Cambridge, so the negotiation is only with Comcast. There is no limit to how many cable companies can service a town, but Cambridge’s attempts to get RCN to apply for a franchise failed and Verizon has never applied either, though they may be waiting to see what falls out from a telecommunications bill at the State House. So right now, the City only has to prepare for one renewal process.

The basic idea behind cable franchises is that local governments control the public ways (streets and sidewalks), which cable companies need to string their lines. The whole process is governed by state and federal law, leaving the City with little control over things like cable content, rates (which only require a 30 day notice to the City to change) and so forth. We can (and have) required public access channels and can also set customer service standards. In fact, the Cambridge Consumers Council (consumer@cambridgema.gov) handles complaints about the cable company, should you wish to contact them.

So, every ten years or so, the City gets a chance to have a public process to look at our communication needs for the next ten years and how they relate to our cable franchisees. In particular, the City asks:

Is the company adequately compensating the City for its rights of way? The amount the City can charge is capped at 5% of gross revenue on television/video service only, of which 3% goes to CCTV via a contract with the City and 2% goes to municipal TV. So if a company is just providing internet access, like Verizon does, it doesn’t need a franchise agreement and it doesn’t pay the City for access to Rights of Way.

Is the company meeting community needs?

This process will take about 18 months, as the current Comcast franchise is set to expire in December of 2010. During this time, the City (via the contractor) will look at Comcast’s nuts and bolts operation, to include installation quality (by hooking up monitors to various parts of their lines), checking connections, looking for signal leakage, reviewing complaints and so forth to try to get a better understanding of what level of service Comcast is currently providing. The contractor will investigate Comcast’s compliance with current obligations and Comcast’s fee structure, conduct a random telephone survey about Comcast’s service (400 folks to be interviewed, 5% error rate), review the City’s fiber optic capability and so forth. There will be 4-6 community focus group meetings in early October and the City has started a Citizens Task Force of about 40 people to help gear up for these focus groups. There will also be an on-line survey for about 4 weeks during roughly the same time, as well as a public hearing. Harvard and MIT have both been asked to participate.

The contractor will meet with CCTV and municipal TV staff to review resources and training, and to get a sense of what the City has right now to help set out a needs assessment, both for right now and over the next ten years (which is the life of the contract).

All of this information is used in negotiating with Comcast about a new contract, which can take a while. If the City and Comcast can’t come to a contract (which rarely happens), the issue goes to an administrative law court and if the problems aren’t solved there it goes to federal court.

Denial of an application can only be based on a narrow group of four things, which is what the pre-contract negotiation study process sets up for discussion. The license can be transferred, for example from American Cable Vision to AT&T as companies merge and whatnot, but it’s unlikely Comcast, or some other company, would not want to keep this franchise active given all of its investment in infrastructure. And because technology changes so rapidly, it’s important not to define a franchise too tightly. Right now, Comcast is putting fiber deeper into neighborhoods, which could relieve pressure on nodes and allow customers to be offered more services. But they can’t cherry pick services by neighborhood- if they offer something someplace, they’ve got to do so (or at least plan to do so) for the rest of the City because this is a City-wide franchise and the service must be city-wide as well.

The City’s contractor will be doing quality checks throughout the system, checking connections, looking for signal leakage, reviewing complaints and so forth to try to get a better understanding of what level of service Comcast is currently providing.

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